Find yourself trying to do more with less? You’re not alone. Cost management is one of the biggest priorities for companies today. To ensure you’ve whittled down your costs as far as they can go, read on.
3 Strategies to Reduce Costs
Here are several strategies that successful retailers, ecommerce companies and manufacturers employ to reduce their bottom line:
Transportation management – It pays to explore available shipping options. Leveraging strategically located DCs that are closer to end customers can reduce transit times and control shipping costs. Often, lower-cost ground service can be used in place of expedited shipping to get products where they need in just one or two days. Cultivating relationships with a variety of carriers allows more flexibility to choose the optimal mode/level of service for each shipment at the best price. It is also important to routinely review contracts with carriers and renegotiate where possible. Pooling parcel packages and leveraging postal work-share options like presorting and drop-shipping can also help to control costs.
Continuous improvement – In today’s competitive marketplace, it is critical to continually look for new ways to do things more efficiently and cost effectively. Lean Six Sigma methodologies can help to reduce waste and prevent defects through process improvements and problem solving. Seemingly small changes can add up— improving cycle time, increasing footprint density, developing more cube efficiency, reducing product damage, etc. Improving productivity, accuracy and consistency ultimately helps to deliver significant cost savings… immediately and in the long run.
Logistics outsourcing – The vast majority of shippers (75 percent) say that using a 3PL helps reduce overall logistics costs, according to the 2017 Third-Party Logistics Study. Third-party providers can help their customers to control costs and reduce capital expenditures related to transportation, labor/training, warehouse space, equipment and technology. In a shared-space environment, for example, a logistics provider balances the needs of multiple customers. This arrangement allows each company to accommodate fluctuations (seasonal, promotional, business growth etc.) and meet peak requirements without having to invest in permanent assets. They can also leverage a 3PL’s economy of scale and collective buying power.
Try one (or more) of these strategies today and make the most of your business.
For additional cost-saving ideas, learn more about our logistics solutions.